Gov. Sam Brownback's Budget Director Steve Anderson (left) speaks with Kansas Board of Regents members Robba Moran and Kenny Wilk on Wednesday prior to a budget discussion during the board's annual retreat held at Valley Falls.

Valley Falls, Kan.  The Kansas Board of Regents on Wednesday discussed the possibility of keeping tuition flat next year if the Legislature restores $36 million in higher education funding cut during the 2013 session. Republican legislative leaders quickly responded that the regents are looking for scapegoats, and Gov. Sam Brownback, who opposed the deep cuts but signed them into law, suggested more conversation on the entire higher education funding issue.

"It's disappointing that the Regents are openly using students as hostages to unnecessarily extract money from taxpayers," said House Speaker Ray Merrick, R-Stilwell.

Senate President Susan Wagle, R-Wichita, agreed. "Positioning Kansas students and families as bargaining chips in a budget debate is the wrong tactic," Wagle said. "During an economic downturn that has slaughtered family budgets, they (regents schools) have dramatically expanded administration and salaries with little justification."

Earlier, several regents members said they thought it was a fair proposal.

"I think it would be a powerful message," said Regent Vice Chairman Kenny Wilk, of Basehor.

During its annual retreat, the board said its top priority for the 2014 legislative session will be for the Legislature to restore the cuts made this year. If those cuts are restored, Wilk's proposal would hold tuition to current levels.

Regent Chairman Fred Logan said that would be the first time in 30 years that the regents didn't approve an annual tuition increase.

"If we don't get the restoration (of funds), all bets are off on tuition," Logan said.

A majority of the 9-member board said they agreed with the proposal.

But Regent Tim Emert, of Independence, said he would oppose it, saying it wouldn't be fair to the universities.

The regents said it would study the flat-tuition proposal further before making a final decision next month on whether to recommend it to Gov. Sam Brownback as he puts together his state budget proposal.

During the recently concluded legislative session, Republicans in the Legislature approved and Brownback signed into law cuts to higher education, making Kansas one of the few states in the nation to reduce funding to post-secondary institutions.

The cuts totaled $8.3 million to the KU Medical Center over two years and $5.3 million to the Lawrence and Edwards campuses. The Legislature also rejected a proposal aimed at starting construction of a $75 million medical educational training facility at KU Medical Center.

The regents approved tuition and fee increases at all public universities, including 4.4 percent at the KU Lawrence campus, and 7.6 percent at KU Medical Center for Kansas residents. The board said part of the increases were due to the state budget cuts.

On Wednesday, much of the board's discussion dealt with how to win over conservative Republicans who dominate the Legislature.

Brownback attended the end of the meeting and urged the regents and university leaders to be open with legislators and to let them know what their aspirations are for each school.

"We need to talk more," Brownback said. He reiterated that he would support the effort to restore the cuts, but he said he hadn't analyzed yet the idea of keeping tuition flat in return for restoration of the cuts.

In a morning session, Brownback's budget director Steve Anderson urged the regents to open up lines of communication with legislative leaders. Both Wagle and Merrick are considered conservatives.

"A conservative Legislature can be communicated with and can be a supporter of higher education," Anderson said.

But Emert, a former Senate majority leader, said some legislators believe they "were sent by God to cut budgets and we are an easy target."

He added that higher education officials tried hard during the last session to explain budget issues with certain legislators. "They smile and say everything is wonderful and then stab you in the back," Emert said.

Wilk, also a former legislator, said he was troubled to hear some legislators argue that because schools such as KU, were exceeding goals in raising private funds then that was a reason to cut state funding.

Wilk argued that philanthropic funding "is a good thing" and shows that donors believe the schools are performing well.

Logan described as "ignorant" some comments he has read of legislators who were critical of universities raising outside funds. He later declined to specify who he was talking about.

Anderson said higher education officials need to show legislators what the state is getting for the taxpayer investment in the schools. And, he said, a popular belief among conservatives is that the more money spent on public education, the more that hurts private colleges.

In a statement on the tuition proposal, Merrick and Wagle slammed regents institutions for tuition increases over the past several years that they said exceeded the rate of inflation. Merrick also said universities started last year with $107.9 million of prior years' tuition in the form of unencumbered cash balances.

"Speaker Merrick and I have opened the door for extensive budget negotiations. We expect answers and we expect results," said Wagle. "The Kansas Legislature will not be the scapegoats for a failure to justify exorbitant tuition increases across the state and expanding student debt."

Comments

The right wing extremists would rather have a whipping boy than a workable solution. They're absolutely unwilling to take responsibility for their own drastic cuts and the damage they've chosen to cause. Ideally they'd like to drive off competent educators to make room for ideological toadies who will work on the cheap, since no responsible institution would hire them. Wagle, Merrick et al. would much prefer a Liberty University model with fundie indoctrination the only available "education."

Education cuts cuts, in turn, are necessary to fund Dave and Charlie's tax windfalls, which ultimately provide the campaign contributions necessary to keep these clowns driving the legislative car. This closed system will remain in place until the results are bad enough to spur corrective action by voters who can think beyond nominal party affiliation.

Actually, some of the tuition increases have been used to increase cash reserves. As noted in Table 7 of "A Historical Perspective of State Aid, Tuition and Spending for State Universities in Kansas" http://www.kansaspolicy.org/ResearchCenters/Education/Studies/d104135.aspx?type=view General Fees Funds of state universities increased by nearly $100 million over the last ten years. These funds operate like a checkbook...the balance only increases when more money is deposited than spent.

Also note Table 2, which shows that tuition jumped 137% on average while inflation was only 25%.

Whatever, try to spin it however you want, fact is for normal Kansans this hurts us immensely. You didn't cut the sales tax, cut every thing you could, just so your Koch boys could get a tax break. You people are evil and you doing this on the backs of people who can't afford to live. Where are the jobs, there is nothing new coming except part time and low wages for us working folk, something I guess you'll never understand or care to. Your a selfish pig and you better hear the train coming and I hope you get hit by it.

In FY 2013, only $3.7 million at the Lawrence Campus and $600,000 at the KU Medical Center could be considered "reserve" funds that can be used for unexpected expenses. The General Fees Fund cited above is used to maintain university operations - including paying employees and vendors - during the summer before tuition payments are received in the fall. As a result, taking a snapshot at the start of the fiscal year does not provide an accurate picture.

Come on, Jack. That's just not true. You're trying to qualify something as "unexpected expenses" to distract attention from the truth. General Fees Fund balances can be used for expected or unexpected expenses. It's unrestricted money and represents tuition dollars collected in prior years but not spent.

Taking a snapshot at the beginning of a fiscal year indeed provides an accurate picture (assuming, of course, that financial records are properly maintained). Accountants...like me...know that government funds operate on a cash basis. The only way those balances increase each year is that tuition dollars deposited in the funds exceed expenditures. An annual snapshot at the beginning of each year is an absolutely reliable and accurate way of understanding what took place in the prior year.

An annual snapshot that is taken at a time when a fund is near its peak because it is needed to pay expenses during the weeks and months prior to revenue being received creates an inflated sense of what is available to spend. As does conflating the General Fees Fund with a "reserve" that is not committed.

Jack, I'm sure you are repeating what you've been told, but that's simply not true. Press releases do not supersede financials statements and Generally Accepted Accounting Principles.

On July 1, 2003 KU had $4.3 million in General Fees Fund unencumbered cash. On July 1, 2012 KU had $24.0 million in that fund. That means that KU collected $19.7 million more in tuition over those ten years than it spent. All of that money is available to be spent.

I recommend that you review the fact sheet that was put together by individuals who have experience in managing the finances of a university with a $1.2 billion budget. I'll quote it here, as it directly addresses your statement:

"Prior to 2010, the university maintained too small of a balance in the [General Fees Fund], which often led to problems covering payments until tuition collections in September. The university's current policy aligns with standard accounting practices of maintaining two months' expenses in the operating fund. Payroll on the Lawrence campus for July and August 2012, for example, was approximately $15.4 million."

I know that it is your contention, as it was a couple of years ago when similar statements were made about K-12 schools, that universities should essentially operate hand-to-mouth. Doing so would have left the university unable to pay many millions of dollars in expenses last summer.

Now you're making things about my intentions. My point is that the university has options to avoid a tuition increase. They could use a portion of the millions collected in prior years, They could reduce administrative costs that grew at three times the rate of inflation over the last ten years. And there are many other options. No one is suggesting that the university operate hand-to-mouth. That's just another diversionary tactic.

Whether K-12, higher education or any other government agency, our focus is on achieving desired outcomes while making efficient use of taxpayer money. Every entity needs some degree of reserves but no independent audit has ever been conducted to determine what they might be. No government agency is shy about saying it needs more money, but there is no record of an agency coming to the legislature and saying they don't have enough cash reserves. The issue only arises when a legislator or KPI points out that cash reserves have been growing significantly...then all of a sudden Fact Sheets are produced to defend existing balances and claim balances were too low in the past.

How so? Are you suggesting that you do not hold a radical libertarian ideology?

Also, your governmental leaders suggest that university officials need to converse more with legislators, and then you arrogantly dismiss them when they produce documents to support their financial position.

So, believe all of your numbers and fact sheets, but dismiss all of the universities' numbers and fact sheets.

Apparently he thinks it's an insult to be a libertarian. Or else he thinks the source of his income and outline of his job duties as a representative of a libertarian organization are irrelevant to his posts. I happen to think it's highly relevant. It's a question of integrity.

I'd also love to see a full and open accounting of all KPI and ALEC donors. Either that, or those organizations stop being eligible for tax exempt status.

FYI, when government says unencumbered operating carryover cash balances are "committed"...such as Jack Martin said above regarding General Fee Fund balances...it simply means that they count those balances as revenue in their budget formulas.

Beginning fund balance (prior year money not spent) + anticipated new revenue for this year - anticipated expenditures for this year = anticipated ending balance.

It doesn't mean the money isn't available to be spent.

Even restricted fee funds are available to be spent (on the items to which their restrictions are tied); those balances can be spent down instead of using unrestricted money for those costs. And if there are restrictions that need to be removed, universities should identify those restrictions so legislators can take corrective action.

What's the point of this verbal contest to prove who is right about reserves? That universities shouldn't have them? Do we say that businesses shouldn't have reserves because they are profitable or people shouldn't earn salaries because they have savings accounts? Should the K-State athletic department or football team not have reserves? Isn't having reserves simply natural and smart business practice? KU has recently engaged in a much-hated Changing for Excellence process precisely to save money on business practices that don't directly affect teaching and learning. Should it not do that? Should universities go back to old ways of state government: spending down excess money at the end of the year on whatever just to get rid of the money?

Why don't you accountants (who seem to be suggesting that universities shouldn't have money) also look at the historical data that clearly show how Kansas has shifted the burden of paying for college from from government to individual students and their families? There are few attributes of Kansas that are recognized positively outside the state. We have no mountains, streams, ocean to attract positive acclaim. Our universities are one of the few things for which Kansas competes relatively well and is known for nationally. In order to do excellent teaching and research to keep that positive reputation, it must compete in a national arena and compete at a high level. Tax policies alone can't attract business to a state that has a second-rate education system. If you live in the state of Kansas you will only punish yourself and your children by not supporting a strong education system at all levels--especially if most states have now turned the corner and are now supporting education financially.

What bothers me so much about this is that KU has no lobbying power ever since they outlawed direct or indirect use of public money to lobby the KS Legislature. But the Big Ag companies and the polluters can keep bellying up to the trough with impunity.

What can KU and the Regents do? Everything they do seems to be wrong somehow.

The legislators make a show of "listening" when the only people or entity they listen to is ALEC. It is all a ploy -- the Governor is the "good cop" while Wagle, Merrick and Rhodes are the "bad cops." They have no intention of restoring cuts to higher or K-12 education. Anderson came right out and said it: they want everything to be private (so that they can control everything and reap financial rewards from those private companies). There is only one way out of this for a better Kansas: elections in 2014.

You supply the reported numbers and then misinterpret them for us or leave out the ones that don't support your pre-defined narrative. See your two data points in this thread from 2003 and 2013 for a classic example. You cite a snapshot that you've already been told was misleading, and then you fail to mention any other things that may have changed in the last ten years, such as the portion of KU funding coming from the state or changes in reporting or expenses. You also tend to cite things in nominal figures instead of real money in order to inflate the differences.

"We need to talk more," Brownback said. (About what? The governor was so "opposed" to those deep budget cuts to education that he signed them into law.)

"It's disappointing that the Regents are openly using students as hostages to unnecessarily extract money from taxpayers," said House Speaker Ray Merrick. (Says a conservative Republican who helped pass the 2012 tax law that extorts salaried workers for state operating funds but exempts 191,000 of the wealthiest Kansans -- business owners -- from having to pay a dime.)

Senate President Susan Wagle: "The Kansas Legislature will not be the scapegoats for a failure to justify exorbitant tuition increases across the state and expanding student debt." (No need to defend the entire Legislature. Anti-education conservative Republicans and Tea Partiers are the situation's perpetrators; voters know it and will hold them politically accountable.)

Legislators plan to visit the state's public universities this fall with open minds in order to learn more about them and their finances, etc. Statements such as "the Regents are openly using students as hostages to unnecessarily extract money from taxpayers" (Merrick) and "Positioning Kansas students and families as bargaining chips in a budget debate is the wrong tactic" (Wagle) don't bode well for the success of those visits. Sadly, the final outcome next spring will probably be "no tuition increase" in exchange for "no new funding," let alone restoration of the $36 million cut in 2013. I'd like to be proven wrong about that, and I hope the legislators leave the rhetoric at the door when they come to campus.